What Is the Difference Between a Flow Variable and a Stock

question 76

Multiple Choice

What is the difference between a flow variable and a stock variable?

• A) A stock variable is a variable that is measured over a specific period of time while a flow variable is a variable that is independent of time.
• B) A flow variable is a variable that is measured in units of current prices while a stock variable is measured using prices from a base period.
• C) A flow variable is a variable that is measured over a specific period of time while a stock variable is a variable that is independent of time.
• D) A stock variable is a variable that is measured in units of current prices while a flow variable is measured using prices from a base period.

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Definitions:

Numeraire

A unit of account or standard measure in economics used to compare the value of goods or services.

Pareto Optimal

Another term for Pareto Efficient; describes a situation where no one's condition can be improved without worsening someone else's condition.

Initial Endowment

The initial quantity of goods, services, and assets that an individual, organization, or economy possesses.

Pareto Optimal

An allocation of resources from which it is impossible to reallocate without making at least one individual worse off.